Articles Posted in prevailing wage law

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The New York City Council is expected to weigh in on the city’s employment practices as they pertain to school district cleaners and other custodial employees.
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The problem, say fair pay advocates for the workers, is that some custodial employees are hired to work as “custodial engineers” for the public school district, as opposed to “private contractor custodians,” who are hired by the city. The former are paid $19.72 hourly, while the latter are compensated $23.85 an hour.

That difference breaks down to approximately $8,000 annually, and this is despite the fact these workers essentially do the same jobs at the same schools and sometimes are even working on the exact same block.
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Employers contracted to complete a public work project must become informed of local and state prevailing wage law, as the cost of non-compliance is steep. Because fines and penalties are calculated on a per-day basis, a month-long project can result in 30 separate violations. usadollarbills.jpg

From January 2014 through July 2014, the New York City comptroller’s office said it has assessed $4 million in prevailing wage violations, plus an additional $250,000 in penalties paid to the city.

There are similar rules for companies that secure federal government contracts, under the Davis-Bacon Act. That measure applies to contractors and subcontractors working on federally-funded or assisted contracts of more than $2,000 for construction, alteration or repair of public buildings or public works. In addition, companies that land federal contracts in excess of $100,000 must pay laborers, mechanics and guards time-and-one-half the regular rate of pay for any hours worked over 40.
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Under New York’s prevailing wage law, private contractors who are awarded public contracts for construction or maintenance of a public project must pay workers according to the approved prevailing wage schedule, set forth by either the State Department of Labor or the New York City Office of the Comptroller.
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The purpose of a prevailing wage is twofold: The first is to ensure workers have a decent quality of life. The second is to assure the construction of and services within a government-owned facility are of high quality.

Workers covered under this statute are most often those in building, construction and service trades, which could include everything from gardeners to janitors. The amount of pay is based on the local collective bargaining agreement with at least a third of the trade union membership for each jurisdiction. That means the wage schedules vary on a county-by-county basis. Based on the current schedule, a Class C janitor in New York County would be entitled to a current prevailing wage of $23.35 an hour, whereas a janitor in Nassau can expect to receive a prevailing wage of $12.32 hourly.

Those employed in trades are increasingly becoming educated on employer obligations under this law, and in turn have received compensation in cases where companies failed to pay workers appropriately. While current laws don’t generally allow workers to sue their employer for prevailing wage violations, many have found that hiring an experienced prevailing wage attorney has resulted in the facilitation of formal complaints with relevant government agencies, which in turn remedy the situation by requiring back-pay and future compliance.
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Recently, the Second Circuit Court of Appeals sought guidance from New York’s highest court on whether to defer to state labor officials on interpretation that the prevailing wage requirement for certain government contracts be paid only prospectively. sprinkler.jpg

The request for certification from the New York Court of Appeals in the case of Ramos v. SimplexGrinnell LP is rooted in a 2011 decision in federal court that granted SimplexGrinnell a summary judgment on a third-party breach of contract claim. Workers who had installed fire and sprinkler systems in government buildings while working for the firm alleged that the company had not paid them prevailing wages since at least as far back as 2001. As this was a “public works” project, the workers indicated, it was in clear violation of New York Labor Law, Article 8, Section 220.

New York City prevailing wage lawyers know that the law is quite clear: Every public works contract must have provisions to pay workers the prevailing wage. The Court of Appeals has previously indicated that employees, as intended third-party beneficiaries of those contracts, can bring breach of contract claims if they are not fairly compensated.
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Under New York State’s Labor Law, government contractors and subcontractors have to pay the set prevailing wage and fringe benefits to workers. The exact rate, which is pre-determined, depends on the type of work and where it’s performed.
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Willful violations of New York’s prevailing wage law by contractors can be met with severe penalties, including interest of 16 percent from the date of underpayments to the date of restitution and a penalty of up to 25 percent of the wages, supplements and interest.

Prime contractors can be held responsible for the non-compliance of subcontractors, so it’s important that companies be diligent in ensuring their pay structure is properly designed.
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Less than a month after a federal court judge in Manhattan ruled that New York City Mayor Michael Bloomberg had no standing to challenge New York City’s Living Wage Law, the state supreme court struck down prevailing wage measures.
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The decision was hailed as a victory for Bloomberg, who had attempted to veto the legislation when it was first passed by the City Council last year. The measure would have raised wages for janitors, security guards and other building workers in structures that receive substantial government subsidies or where in the city is a major tenant.

Bloomberg has said the measure will deter businesses from entering the city, but Council overrode his veto. Still, enforcement of the measure was delayed pending appeals.

Council had also overridden Bloomberg’s veto of the city’s living wage law, which would have bolstered the pay of a broader range of workers employed by firms that receive city government subsidies.

The mayor’s office sued the city in federal court over the living wage law and in state court over the prevailing wage law.

Following the federal judge’s ruling regarding the living wage law last month, the mayor’s office vowed to refile the case with the state court. That measure calls for a mandated wage of $10 hourly with benefits or $11.50 hourly without benefits. Standard state minimum wage is currently $7.25, though a law has passed to boost it to $9 hourly by 2016.

Prevailing wage, meanwhile, is a standard set by the city comptroller for certain public work projects. Those wages vary depending on the employee’s occupation, and they are supposed to reflect rates that are in line with what a union charges. Most workers were already paid those rates, but the prevailing wage law made it official. It was strongly backed by Local 32BJ of the Service Employees International Union.

Applicable entities included those who received $1 million or more in city tax abatements or low-interest financing in buildings that are leased by the city. Exempted organizations included non-profits, smaller companies, manufacturing plants and health care facilities.

The bill formally took effect last fall.

However, now the state supreme court has ruled in Mayor of the City of New York v. New York City Council that the city’s prevailing wage law is invalid because it is preempted by the state’s minimum wage law.

Those who supported the measure say this ruling may be a victory for Bloomberg, but it’s a loss for low-wage earners in the city. Even the judge who rendered the decision expressed regret about it, saying that while the decision was reached strictly in accordance with the law, he failed to see the wisdom in attracting businesses to the city that sought to pay employees less than the prevailing wage rates. The justice said his decision came with “great compunction.”

City council leaders have said they intend to appeal the decision.
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